I’d buy 20,409 shares of this ASX stock to aim for $2,000 of annual passive income

There are not many ASX dividend stocks that I think could be a better choice for long-term annual passive income than WCM Global Growth Ltd (ASX: WQG).

The business is a listed investment company (LIC) that gives investors exposure to a high-quality portfolio of international shares and an impressive record of regular dividend growth.

LICs generate their (accounting) profits by making investment returns, so the strategy and level of performance are essential for paying large and growing dividends.

So, we’ll start by looking at why WCM Global Growth invests and then look at the dividend potential of the business to make $2,000 of annual passive income.

Impressive investment performance

There are two main elements that the fund manager looks for.

First, it wants to invest in businesses with good economic moats, or durable competitive advantages. It’s focused on the moat trajectory – is it structurally improving – rather than the size of the moat. WCM also uses a forward-looking competitive assessment as part of its process.

Second, the culture of the business is important as a source of advantage. WCM looks at factors like “leadership, alignment, adaptability” and how that can drive long-term value creation.

But, as you’d expect, there are a few other elements of the investment process.

WCM wants to find businesses benefiting from tailwinds with long-term secular trends that can help deliver compounding growth. Preferably, there’s a global structural demand supporting earnings.

The ASX stock has a high-conviction portfolio, meaning it’s concentrated in just WCM’s best ideas, not hundreds of names that could mean being too diversified.

On the valuation side of things, WCM looks for businesses offering great growth at fair prices, while maintaining a “downside protection focus” and an “active risk management”. This has helped its portfolio to decline less than the global share market when there are falls.

At 31 January 2026, its portfolio had delivered an average net return of 16% per year since inception in June 2017, outperforming the global share market by an average of 2.7% per year. The returns have been very good and helped fund a pleasing dividend, though that’s not guaranteed every year or over the long-term.

Excellent ASX dividend stock credentials

The business has increased its half-year dividend every year since FY19, which is when it first started paying a dividend. In the last few years, it switched to paying quarterly dividends, which is helpful for shareholder cash flow.

WCM Global Growth expects to continue increasing its quarterly dividend every quarter until at least the March 2027 dividend. The business aims to continue increasing its quarterly payout to “enhance shareholder value”.

Annualising the expected FY27 second quarter dividend of 2.45 cents per share means a grossed-up dividend yield of 7.4% (at the time of writing) is within sight and I’m expecting further dividend increases during FY27 (and beyond).

To reach an annual passive income of $2,000 (excluding the franking credits) from the ASX stock, we’re talking about owning 20,409 WCM Global shares at the time of writing.

I think it’s one of the leading ideas to look at for dividends, among others.

The post I’d buy 20,409 shares of this ASX stock to aim for $2,000 of annual passive income appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.